BIR Ruling No. 059-10

September 15, 2010 BIR RULING NO. 059-10 R.A. 7279; BIR Ruling No. 028-94; BIR Ruling No. DA-184-99; BIR Ruling No. DA-065-04; BIR Ruling No. DA-258-08 National Housing Authority Bicol Regional Office MRH Site, Block 1, Villa Grande Homes Concepcion Grande, Naga City Attention: Mr. Albert A. Perfecto Regional Manager Gentlemen : This refers to your letter dated January 5, 2010 relative to the request for exemption from the payment of capital gains tax and documentary stamp tax of Mrs. Pilar Nenita Fuentebella-Peones, landowner of a parcel of land located in Brgy. Sto. Nio, Sagay, Camarines Sur, which is being acquired by the Sto. Nio Neighborhood Homeowners Association, Inc. for its Socialized Housing Project. AHTICD Documents submitted disclosed that Ms. Pilar Nenita F. Peones, with Taxpayer's Identification No. 180-282-901, is the absolute registered owner of a parcel of land described as (Lot 1 of the consolidation subdivision survey Pcs-05-001651, being a portion of Lots 3-72-C-5-A & 3-72-C-5-B, Psd-05-023060) covered by TCT No. T-32157 of the Register of Deeds for Camarines Sur located at Barangay Nato & Hoyon-Hoyon (now Sto. Nio), Sagay, Camarines Sur, containing an unsold area of 8,064 square meters more or less; that Executive Order No. 90 dated December 17, 1986 mandated the Vendee (National Housing Authority) as the sole housing production agency to meet the housing needs of the low and marginal income families in the urban areas; that NHA in coordination with the Representative of each congressional district, is implementing the Local Housing Program to cover implementation of socialized housing project in urban and urbanizable areas in all congressional district pursuant to HUDCC Resolution No. 001 Series of 2001 approving the adoption of the Implementing Rules and Regulations of Rule 8, (Local Housing Program) of Republic Act 7835 and NHA Board Resolution No. 4485 dated January 10, 2002; that NHA developed an alternative mode of providing land tenure and access to legal settlements whose organized communities or low-income families are provided financial resources for the purpose of acquiring the land they occupy; that as an incentive to community initiatives, the NHA shall augment existing resources to lock up agreed land through a loan payable in a short term basis through the implementation of its Land Tenure Assistance Program (LTAP) per Board Resolution No. 3629 dated February 20, 1997, Board Resolution No. 3642 dated March 20, 1997 and Board Resolution No. 4140 dated July 1999; that in compliance with its mandate, NHA, per its Board Resolution No. 3829, offered to buy the said property to be sold later on to Sto. Nio Neighborhood Association and Mrs. Peones, in recognition and as an expression of support to the housing program of the NHA, agreed to sell the aforecited property, together with all existing improvements thereon belonging to Mrs. Penoes; that NHA has authorized the Sto. Nio Neighborhood Association, Inc. to enter subject property so that the members of the community association can introduce site development and construct individual housing structures therein; that NHA has fully paid Mrs. Peones the total purchase price of the said parcel/s of land in the sum of One Million Three Hundred Twenty Eight Thousand Seven Hundred Forty Seven Pesos & 40/100 (P1,328,747.40), Philippine currency, receipt of which was thereby acknowledged to the full satisfaction of Mrs. Peones; that the Project, benefiting 41 families is being assisted by the National Housing Authority under the Local Housing Program of Cong. Arnulfo P. Fuentabella of the 3rd District of Camarines Sur via the Land Tenure Assistance Program (LTAP), a community-based socialized housing program of the government; and that Sto. Nio Neighborhood Homeowners Association, Inc., with Taxpayer's Identification No. 005-778-915, is registered with the Home Insurance and Guaranty Corporation under Registration No. 05-174 dated September 18, 1997. In reply, please be informed that pursuant to Sections 19 and 20 of R.A. No. 7279, pertinent portions of which read: "Sec. 19. Incentives for the National Housing Authority. The National Housing Authority, being the primary government agency in charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favour of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of the transfer certificates of title. "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater participation in socialized housing, and further reduced the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: "xxx xxx xxx "(d) Exemption from the payment of the following: "(1) . . . "(2) Capital gains tax on raw lands used for the project; xxx xxx xxx" The conveyance to the NHA by the landowner of the above-mentioned parcel of land under the socialized housing program is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. No. 7279. CHIScD Upon issuance of this letter of exemption, and upon registration of the documents of sale, lien on the Certificate of Title of the said parcel of land, which shall be issued in the name of the NHA, shall be caused to be annotated by the Register of Deeds having jurisdiction over the properties to the effect that the said properties shall be used for socialized housing pursuant to R.A. No. 7279. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue